Program on International Policy

Americans on Health Care Policy

Introduction
August 30, 2000

In 1994, the Clinton Administration attempted to bring about a transformation in US health care by introducing "managed competition" to the health care market. The massive and complex reform effort was meant to address the American publicís primary concerns about health care: the lack of universal health insurance coverage and the dramatic rise in health care costs. But even though there was strong public support for reform in general, the Clinton plan never galvanized public support. It failed to survive a bruising battle in Congress and over the airwaves, and in the end, there was no reform.

Nevertheless, six years later, the US health care system is significantly changed. The industry itself took steps to control costs by establishing health maintenance organizations (HMOs) and managed care plans. These have increasingly overtaken the provider market, squeezing out traditional fee-for-service insurance. By the mid-1990s, 85% of all insured Americans were in a managed care plan1 and only 18% of employers even offered a traditional fee-for-service plan in 1998.2 In addition, since 1994, the number of for-profit health plans has fallen by two-thirds, leaving just six major alliances dominating the health insurance market.3

Largely due to the shift to managed care, health care costs did moderate during the 1990s. By limiting access to specialists, requiring plan approval for expensive treatments, and establishing contractual links to doctors and hospitals, thereby shifting the incentive structure from exhaustive care toward fewer treatments and doctor visits, managed care companies were able to rein in rapidly growing health care costs. In 1993, health care spending was 13.7% of GDP and rising quickly, but by 1998 national spending had fallen (helped along by the humming economy) to 13.5% of GDP.4 Thanks in part to the burgeoning of cost-conscious managed care, private health spending rose about 14% during that five year span, compared to a rise of nearly 57% between 1985 and 1990. 5

However, at this point it is likely that most of the savings possible through HMOs have already been realized. The Health Care Financing Administration estimates that national spending on health care will rise by 1.8% over the growth of GDP between 1999 and 2008, reaching $2.2 trillion and 16.2% of GDP. 6

Another major issue is the number of Americans without health insurance, which has grown substantially since 1994. This is also a continuation of trends that emerged in response to the rapid growth of costs. Smaller businesses, newer firms, and those in non-unionized sectors Ė areas that account for a great deal of recent job growth Ė are less likely to offer insurance to employees. In mid-1999, 62% of Americans enjoyed employment-based insurance, compared to 71% in 1977.7 The number of uninsured Americans grew from 32 million in 1987 to 44 million, including over 11 million children, in 1998. Eighteen percent of the US population under age 65 does not have any kind of health insurance.8

Rapid improvements in technology, combined with an elderly population that is expected to double by 2030, also point to higher national health costs in the future. As patients live longer and have more acute medical problems, they become significantly more expensive to treat. In the 20 years prior to 1999, Medicare spending for the elderly doubled as a percentage of the federal budget, from 6 to 12 percent.9 As the baby boomers begin to retire and the number of Medicare recipients rises rapidly, health spending for the elderly will grow quickly as well.

One result of this demographic trend, combined with new breakthroughs in medical technologies and treatments, is more frequent efforts to extend the life of terminally ill patients for a few weeks or months. As these efforts increase, the financial burden on the health care system will naturally grow. A recent Reuters Health report noted that the Medicare Payment Advisory Commission found that between 1994 and 1998, about a quarter of all Medicare spending was for end-of-life care. For a patientís last year of life, Medicare spending averages about six times what is spent on other beneficiaries.10 On a national level, some have estimated that as much as 30% of all US health costs are racked up in the last six months of a patientís life.11

In addition, there has been a dramatic rise in drug prices over the last few years. The League of Women Voters and the Kaiser Family Foundation assert that the "prices of the 50 prescription drugs the elderly use most frequently rose by more than four times the 1998 inflation rate."12 At the same time, many US seniors in Northern states are now going across the border to fill their subscriptions in Canada, where government rules keep drug prices far below prices in the US. Congress is also considering legislation to add a prescription drug benefit for Medicare.

Thus, even though the US health care system is markedly different than it was when Clintonís reform effort began, the story is similar in many ways. When it comes to health care, Americans still are concerned primarily about expanding insurance coverage in the US population and controlling health costs. Health care reform remains a very important issue for Congress and for this yearís presidential election.

Though it is generally recognized that the public is concerned about health care issues, majority attitudes and opinions about the US health care system can be better understood than they are today. This condition is not due to a lack of research: there is a wealth of valuable polls on health care, and this report owes a considerable debt to these studies. However, there has been too little comparison and synthesis of this data.

This study seeks to provide that synthesis as well as providing new data from focus groups and a nationwide poll. This study seeks to address the following questions about Americansí attitudes:

  • What are the publicís primary concerns about the health care system? What degree of change (if any) does the majority want?
  • What role do Americans want the government to play in the health care system?

Do they believe that the government has a responsibility to ensure health care to all Americans or is this simply seen as the responsibility of the individual?

  • Do Americans want to see the government make an active effort to expand health care coverage? How do Americans feel about specific vulnerable groups, such as children, people with low incomes, the unemployed, and those approaching retirement age? What role do Americans want employers to play? Is the private sector perceived as having an obligation to employees regarding their health care? What about seniors and the costs of prescription drugs and long term care? Is the publicís willingness to pay a reasonable match for the programs a majority says it wants?
  • How does the public view health care costs in generalóboth todayís costs and those projected for the future?
  • In the effort to the control costs, is the public willing to accept some limitations on the health care it receives? What is its attitude toward the recent limitations brought about by managed care? Does the public have confidence that the savings of managed care are not simply being pocketed by the health care industry? What is the publicís attitude about the backlash against managed care expressed in the push for a "patientsí bill of rights?"
  • If various limitations on health care delivery were offered as voluntary options that brought insurance savings, how much of the public might respond favorably? Could limitations on extreme measures in end-of-life care -- of the type specified in Ďliving willsí -- be acceptable as such an insurance option?
  • What role does the majority think the government should play in the effort to control the rising cost of prescription drugs?

To find out how Americans feel about these issues, the Center on Policy Attitudes conducted an in-depth study that included:

    • A comprehensive review of existing polling data from other sources;
    • Focus groups in Richmond, Virginia, and Cleveland, Ohio;
    • A nationwide poll of a random sample of 652 respondents (margin of error 4%) conducted June 23 Ė July 9, 2000 (results were weighted to be demographically representative).
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